Skillsoft 2026 Q1 Earnings Misses Targets as Net Income Falls 37.7%

Skillsoft (SKIL) reported its fiscal 2026 Q1 earnings on June 9th, 2025. Skillsoft's first-quarter results fell short of expectations, with revenue declining by 2.8% year-over-year to $124.20 million. The company maintained its fiscal 2026 outlook, projecting GAAP revenue between $530 million and $545 million. Adjusted EBITDA is expected to be within the range of $112 million to $118 million. Despite the challenging economic environment and soft discretionary spending, Skillsoft's Talent Development Solutions segment showed continued growth.

Revenue

Skillsoft's fiscal 2026 Q1 revenue decreased to $124.20 million, marking a 2.8% decline from the previous year's $127.79 million. Within the Talent Development Solutions segment, revenue reached $99.15 million, reflecting a positive trend. Conversely, the Global Knowledge segment saw a 16% decline, contributing $25.05 million. The company remains focused on its strategic growth initiatives to counteract these revenue challenges.

Earnings/Net Income

Skillsoft reported a net loss of $38.05 million for fiscal Q1 2026, up from $27.64 million in the previous year, translating to a loss of $4.57 per share compared to $3.42 per share last year. The wider loss signifies ongoing financial pressure.

Post Earnings Price Action Review

The strategy of purchasing SKIL shares following a revenue miss and holding for 30 days has proven ineffective. Historical backtesting demonstrated a significant loss of 93.35% and an excess return of -127.58%, indicating not only a failure to achieve profits but also an underperformance compared to the benchmark. The negative Sharpe ratio of -0.63 highlights the poor risk-adjusted return, while a maximum drawdown of -97.71% underscores the substantial risk associated with this strategy. Investors are urged to reconsider this approach due to its high risk and historically unfavorable outcomes.

CEO Commentary

“We are pleased to have delivered first-quarter results in line with expectations despite a challenging economic environment, particularly a softening of discretionary spending which disproportionately impacts our Global Knowledge business segment,” said Ron Hovsepian, Executive Chair and Chief Executive Officer of Skillsoft. He noted the strength of their strategy aimed at achieving at or above market growth rates, highlighting the three consecutive quarters of revenue growth in the Talent Development Solutions segment as a positive indicator of their ability to drive top-line growth this year.

Guidance

Skillsoft reaffirms its fiscal 2026 outlook, projecting GAAP revenue between $530 million and $545 million and Adjusted EBITDA between $112 million and $118 million, reflecting their current market view. CFO John Frederick indicated that while free cash flow for the second quarter is expected to be lower due to working capital normalization, they remain on track to meet prior full-year free cash flow expectations.

Additional News

Skillsoft has made significant executive appointments recently. On May 1, 2025, Raianne Reiss joined as Chief Marketing Officer, bringing over 20 years of experience in technology sector marketing. Her previous roles include EVP and CMO at Yext, VP of Marketing at Elastic, and Head of Americas Marketing at Amazon Web Services. On May 15, 2025, John Frederick was appointed as Chief Financial Officer, succeeding Rich Walker. Frederick, who previously served as Chief Transformation Officer, has been pivotal in business planning and strategic initiatives to enhance growth and efficiency. Furthermore, Skillsoft announced the grant of 50,000 restricted stock units to Reiss as an employment inducement award under NYSE Rule 303A.08.