Skillsoft Earnings Preview: Growth Amidst Market Shifts

Skillsoft's fourth-quarter results reflected mixed performance, with revenue holding steady at $134 million year-over-year (YoY) despite a full-year decline to $531 million according to financial reports. The drop was driven by a 13% contraction in its Global Knowledge segment, offset partially by 1% growth in Talent Development Solutions. Strong margin management remained a bright spot, as adjusted EBITDA expanded to 21% of revenue, and the company generated $12 million in free cash flow-a notable improvement from prior years. Strategic bets on AI-driven learning tools, including a simulator with over 1 million launches, and partnerships with firms like SAP, signal efforts to modernize offerings.

However, broader market challenges linger. The global learning management system (LMS) sector is projected to grow at a 19.8% compound annual rate through 2030 according to market analysis, yet SaaS licensing inflation poses a headwind, dragging on revenue growth with a -2.3% impact. Skillsoft's guidance for fiscal 2026-$530–$545 million in revenue and $112–$118 million in adjusted EBITDA-reflects cautious optimism amid reinvestment in AI and enterprise sales pipelines. While the company targets $45 million in annualized cost reductions, margin pressures persist as it balances growth investments against market inflationary forces.

The company’s AI initiatives are gaining traction, particularly in enterprise learning environments, where its tools are being used to train technical and managerial staff on modern skills. These tools are also being integrated into broader digital transformation strategies across industries, with particular interest in IT and healthcare sectors. Analysts suggest that while current revenue trends are flat, the long-term value of AI adoption in Skillsoft's platform could outweigh short-term challenges. However, the company must continue to innovate and streamline operations to stay competitive in an evolving SaaS market.