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Skillsoft Reports Financial Results for the Third Quarter of Fiscal Year 2023

BOSTON , December 06 /Businesswire/ - Skillsoft Corp. (NYSE: SKIL) (“Skillsoft” or the “Company”), a leading platform for transformative learning experiences, today announced its financial results for the third quarter of fiscal 2023 ended October 31, 2022.

“Q3 results were in-line with our expectations, and we reaffirmed our full year guidance as we continue to be on track for strong bookings and revenue in Q4 which is our largest quarter of the year,” said Jeffrey R. Tarr, Skillsoft’s Chief Executive Officer. “I’m also pleased that we were able to grow our Global Knowledge segment bookings sequentially in the quarter and sustain double digit revenue growth in our Codecademy business.”

Fiscal 2023 Third Quarter Select Metrics and Financials from Continuing Operations1

  • Skillsoft Content Segment LTM Bookings were up 5% and down 4% in the quarter on a constant currency basis due primarily to a downgrade by one account.
  • Global Knowledge segment Bookings were up 3% sequentially and down 16% on a constant currency year over year basis due to previously disclosed subsidy reductions at one partner.
  • Total Bookings of $133 million were down 9% on a constant currency basis primarily due to the Global Knowledge segment.
  • GAAP revenue was down 1% and down 3% on a pro forma constant currency basis primarily due to the Global Knowledge segment.
  • LTM Content Dollar Revenue Retention was 98% and 96% in the quarter.
  • GAAP net loss of $528 million included a $571 million goodwill impairment charge and Adjusted EBITDA was $28M.
  • Ended the quarter with $175 million of cash on the balance sheet after retiring $31 million of our Term Loan B.

Outlook Commentary

We are reaffirming our outlook but moving to a GAAP revenue presentation to conform to GAAP accounting not due to a change in the fundamentals of the business. As such our GAAP revenue guidance excludes approximately $25 million to $30 million of reseller fees. Our other ranges remain the same.

Full Year Fiscal 2023 Outlook2 ($ millions)

Bookings

$580 to $615

GAAP Revenue

$520 to $550

Adjusted EBITDA

$105 to $125

_______________________________________

1 Growth calculated compared to the prior year noted on a pro forma presentation basis as if Skillsoft, Global Knowledge and Codecademy had merged on February 1, 2021. 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 15th.

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.

Key Operational Metrics and Non-GAAP Financial Measures

Bookings

The unaudited bookings for the three and nine months ended October 31, 2022 and 2021 in the following table are adjusted and presented on a pro forma basis as if Skillsoft, Global Knowledge and Codecademy had merged on February 1, 2021. The Skillsoft content line includes Codecademy bookings.

Three Months

Change

(Constant Currency)

Nine Months

Change

(Constant Currency)

(In thousands)

Ended October 31,

Change

Ended October 31,

Change

2022

2021

$

%

%

2022

2021

$

%

%

Continuing operations:
Skillsoft Content

$

84,784

$

90,646

$

(5,862

)

-6%

-4%

$

222,310

$

214,666

$

7,644

 

4%

6%

Global Knowledge

 

47,786

 

61,690

 

(13,904

)

-23%

-16%

 

149,944

 

190,488

 

(40,544

)

-21%

-16%

Total

$

132,570

$

152,336

$

(19,766

)

-13%

-9%

$

372,254

$

405,154

$

(32,900

)

-8%

-5%

 

Pro Forma Revenue3

Pro forma revenue was $139 million and $151 million for the three months ended October 31, 2022 and 2021, respectively, and $423 million and $441 million for the nine months ended October 31, 2022 and 2021, respectively. The unaudited pro forma revenue for the three and nine months ended October 31, 2022 and 2021 in the following table are adjusted and presented on a pro forma basis as if Skillsoft, Global Knowledge and Codecademy had merged on February 1, 2021. The Skillsoft content line includes Codecademy revenue. See the full reconciliation to GAAP revenue to Pro Forma Revenue in the table on pages 13.

SKILLSOFT CORP.

PRO FORMA REVENUE 3

(IN THOUSANDS)

 

Three Months

Change

(Constant Currency)

Nine Months

Change

(Constant Currency)

Ended October 31,

Change

Ended October 31,

Change

2022

2021

$

%

%

2022

2021

$

%

%

Continuing operations:
 
Skillsoft Content

$

97,968

$

98,060

$

(92

)

0%

3%

$

294,565

$

286,208

$

8,357

 

3%

5%

 
Global Knowledge

$

41,422

$

53,206

$

(11,784

)

-22%

-15%

$

128,296

$

154,392

$

(26,096

)

-17%

-11%

 
Pro Forma Revenue

$

139,390

$

151,266

$

(11,876

)

-8%

-3%

$

422,861

$

440,600

$

(17,739

)

-4%

-1%

 

Dollar Retention Rate

The following table sets forth dollar retention rates (“DRR”) for the last twelve-month (“LTM”) period ended October 31, 2022 and 2021 and for the three month periods ended October 31, 2022 and 2021:

October 31

LTM

2022

LTM

2021

Q3

2022

Q3

2021

 
Skillsoft Content (continuing operations)

98%

95%

96%

98%

 

Pro Forma Adjusted Net Loss and Pro Forma Adjusted EBITDA3

The Pro Forma Adjusted Net Income and Pro Forma Adjusted EBITDA for the three and nine months ended October 31, 2022 and 2021 in the following table are adjusted and presented on a pro forma basis as if Skillsoft, Global Knowledge and Codecademy had merged on February 1, 2021. See the full reconciliation and adjusting items in the tables on pages 11 to 14.

_______________________________________

3 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 Skillsoft, Global Knowledge and Codecademy as if the mergers had closed on February 1, 2021. The unaudited pro forma financial information excludes any cost or growth synergies that Skillsoft may have achieved as a result of the mergers.

SKILLSOFT CORP.

PRO FORMA ADJUSTED NET LOSS AND EBITDA3

(IN THOUSANDS)

 

Three Months

Change

(Constant Currency)

Nine Months

Change

(Constant Currency)

Ended October 31,

Change

Ended October 31,

Change

2022

2021

$

%

%

2022

2021

$

%

%

Continuing operations:
 
Pro Forma Adjusted Net Loss

$

(30,704

)

$

(9,119

)

$

(21,585

)

237%

NA

$

(84,183

)

$

(60,019

)

$

(24,164

)

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