Skillsoft Corp.

Total revenue was $98.2 million, down 2.9% versus Q2 fiscal 2026. Adjusted EBITDA from continuing operations was $33.4 million, up 7% year over year, and adjusted EBITDA margin improved to 34% from 31%. GAAP net loss from continuing operations was $15 million, or $1.67 per share, versus a $18 million loss, or $2.10 per share, a year ago. Adjusted net income was $10.5 million, or $1.17 per share, versus $13.6 million, or $1.59 per share. Cash equivalents and restricted cash were $93.1 million, consolidated free cash flow was negative $20.5 million, gross debt was $575 million, and net debt was approximately $481 million. For FY2027, revenue guidance was reduced to $380 million to $390 million from $388 million to $406 million, while adjusted EBITDA guidance remained $108 million to $116 million and free cash flow from continuing operations remained $14 million to $22 million.

Ron Hovsepian framed the quarter as evidence that Skillsoft is becoming a simpler, more focused company after the Global Knowledge divestiture. He emphasized the company’s shift toward an AI-native skills management platform, saying customer conversations are changing and the enterprise pipeline is expanding as buyers look for skills intelligence, AI-enabled content creation, and interoperability. His tone was confident but measured: he repeatedly stressed that the AI opportunity is early, but said management is seeing validation, better retention, and early platform adoption.

Ron Kisling focused on margin discipline, cash, and the updated outlook. He pointed to revenue of $98.2 million, adjusted EBITDA of $33.4 million, and margin expansion to 34%, noting operating expenses fell 7% year over year to $64.8 million and selling and marketing expenses declined 12% to $25.4 million. On cash, he highlighted $93.1 million of cash and restricted cash, negative free cash flow of $20.5 million in the seasonally weaker second quarter, gross debt of $575 million, and net debt of about $481 million. He also quantified the Global Knowledge disposal impact, saying it will consume about $15 million of cash for operations, transaction costs, and stranded costs, with $12 million already incurred through July 31, 2026.

Analysts pressed management on the worsening consumer trend, enterprise stabilization, AI monetization timing, and whether further expense cuts were available. Kisling said consumer declines are accelerating because AI is replacing coding-related learning demand, but the segment should remain profitable and support company-wide EBITDA and cash targets. On enterprise, he said the business is stabilizing and a prior federal cost-cutting headwind should roll off as the company moves into Q3, while Hovsepian said AI product acceptance is early but encouraging and that the company is seeing pipeline expansion and changing customer conversations. On cost structure, management said there is still room for efficiency gains through AI and process simplification, including SKU rationalization that could lead to about a 95% SKU reduction as the company enters next year.