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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