Skillsoft Corp.

Q1 revenue was $94.5 million, down 4.7% year over year. Adjusted EBITDA from continuing operations was $26.6 million, essentially flat versus $26.8 million a year ago, and adjusted EBITDA margin improved to 28.2% from 27.1%. GAAP net loss from continuing operations was $18.7 million, versus a $29.6 million loss in the prior-year period, and GAAP net loss per share was $2.12 versus $3.56. Adjusted net income was $10.2 million, or $1.16 per share, versus $9.5 million, or $1.15 per share. Cash, cash equivalents and restricted cash were $118.4 million, and consolidated free cash flow was $25.4 million. Full-year fiscal 2027 guidance remains unchanged at revenue of $388 million to $406 million, adjusted EBITDA of $108 million to $116 million, and free cash flow of $14 million to $22 million. Management said it expects to consume cash in continuing operations in Q2 and Q3, then generate free cash flow in Q4.

Ron Hovsepian framed the quarter as one of strategic progress despite the revenue decline, pointing to stronger bookings, pipeline, and customer adoption of the new platform. He emphasized that the planned Global Knowledge divestiture will simplify the company, increase focus on the AI-native skills platform, and help position Skillsoft for a more direct path to durable growth. He also said the company sees AI as making its skills visibility and measurement tools more urgent and more valuable to enterprise buyers.

Ron Kisling said the quarter’s revenue decline was driven mainly by prior government booking softness and a continued decline in the consumer business, which he said was down 21% year over year. He noted cost discipline in the quarter: cost of revenue was $15.7 million, selling and marketing was $26.3 million, and G&A was $13.2 million, with adjusted total operating expenses down 6.2% year over year to $67.9 million. He highlighted cash generation of $25.4 million in the quarter, gross debt of $576 million, and net debt of about $457 million. On the GK sale, he said the business has historically generated annualized adjusted EBITDA losses of $10 million to $15 million, transaction-related costs are expected to be $8 million to $10 million, and long-term liquidity impact should be neutral to slightly below neutral.

Analysts focused on the GK divestiture, what management would do with the added bandwidth, and whether there had been any distraction to the core business. Management said the main priorities after the close are continued transformation and debt refinancing, and they said they did not see distraction in the TDS business from the GK transaction. Questions also centered on DRR and the revenue outlook; management said quarterly DRR can fluctuate, but the trend should be flat to up from Q1, and they said the full-year guide already reflects macro variability and remains consistent with the plan.