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- **Revenue Challenges**: Q2 revenue down 2.6% YoY ($128.8M) due to macroeconomic softness in public sector spending, particularly in North America and Middle East. 
- **Transformation Success**: $45M in expense savings, 4Q TDS enterprise growth streak, and 99% TDS DRR highlight operational resilience. 
- **AI Growth Drivers**: AI learners up 74% YoY, with 158% increase in learning hours, underscoring enterprise demand for scalable AI solutions. 
- **Guidance Adjustments**: Full-year revenue revised to $510-530M (down from prior range), but EBITDA ($112-118M) and free cash flow ($13-18M) targets maintained. 
- **Recovery Confidence**: CEO expects 1/4 of lost revenue recoverable over 12-18 months, with Europe showing early GK recovery signs. 


**【CEO Summary Section】**
- **Revenue Impact from Macro Uncertainty**: Q2 revenue declined due to lower discretionary spending, particularly in North America and the Middle East, affecting the Global Knowledge (GK) segment. 
- **Transformation Progress**: 1 year into the transformation, the company achieved $45 million in expense reductions and delivered 4 consecutive quarters of growth in the TDS Enterprise Solution (90% of TDS segment). 
- **Customer Wins**: Secured 3 large contracts (> $1M TCV) with a global athletic apparel brand, semiconductor manufacturer, and European digital services provider, showcasing demand for scalable AI-driven learning solutions. 
- **AI Innovation Roadmap**: Announced upcoming AI authoring tools for faster, cost-effective content creation and expanded global learner support in 50+ languages. AI learners increased 74% YoY, with learning hours up 158%. 
- **Guidance Update**: Full-year revenue guidance revised to $510-530M due to GK softness, but maintained adjusted EBITDA ($112-118M) and free cash flow ($13-18M) targets. 

**【CFO Financial Commentary】**
- **Q2 Financials**: Total revenue $128.8M (-2.6% YoY). TDS revenue $101.2M (-0.9% YoY) driven by enterprise growth, offset by B2C declines. GK revenue $27.6M (-9.6% YoY). 
- **Profitability**: Adjusted EBITDA $28.3M (22% margin), flat YoY. GAAP net loss $23.8M (-39.6% YoY). Free cash flow -$22.6M (seasonal decline). 
- **Cost Management**: Operating expenses down 3.2% YoY ($100.5M). Content dev (-5.9%), G&A (-10.5%) led improvements. 
- **Balance Sheet**: Cash $103.4M, net debt $475M (stable vs. prior quarter). 

**【Q&A Highlights】**
- **Market Segmentation**: Public sector (North America/Middle East) drove GK weakness, while Europe showed early recovery signs. Private sector demand remained stable. 
- **Competitive Position**: TDS DRR 99% (vs. 98.4% YoY), outperforming peers in live learning. Enterprise retention improved 10+ pts with specialized SMEs. 
- **Recovery Outlook**: CEO expects 6-12 months to resolve macro uncertainty, with 1/4 of lost revenue recoverable over 12-18 months. TDS enterprise growth offsetting GK headwinds. 
- **Profitability Resilience**: CFO emphasized ability to maintain EBITDA despite revenue decline through fixed cost reductions and operational efficiency. 


Skillsoft Corp. (SKIL) Q2 2026 Earnings Call Transcript

- **TDS Growth Drives Resilience**: TDS up 1% YoY to $99.1M, offsetting GK decline; LTM retention rate 99%.
- **AI Innovation Paying Off**: CAISY in 40+ languages, Percipio dashboard, Codecademy partnerships.
- **Strong Cash Flow**: Q1 free cash flow $26.2M, up $15.8M YoY; FY26 guidance reaffirmed.
- **Macro Risks**: U.S. public sector softness, elongated sales cycles, but Europe public sector growth.
- **Strategic Focus**: International expansion, AI/tech skills, and disciplined capital allocation.

**【CEO Summary Section】**
- Introduced new CFO (John Frederick) and CMO (Raianne Reiss), emphasizing leadership strength for growth.
- Q1 2026 revenue $124.2M (-2.8% YoY), with TDS up 1% YoY to $99.1M, offset by GK decline (-15.7% YoY) due to macro softness.
- TDS LTM dollar retention rate 99%, showing resilience despite macro challenges.
- Highlighted AI-driven product innovations (CAISY in 40+ languages, Percipio certification dashboard) and partnerships (Codecademy with uConnect).
- Reiterated FY26 guidance: revenue $530-545M, adj. EBITDA $112-118M, free cash flow $13-18M.
- Focused on go-to-market execution and international growth in AI, cloud, cybersecurity.

**【CFO Financial Commentary】**
- Q1 adj. EBITDA $22.1M (17.8% of rev), up $3.2M YoY; GAAP net loss $38M (-$10.4M YoY).
- Free cash flow $26.2M (vs. -$10.4M YoY), driven by strong collections and cost control.
- Total operating expenses $102.1M (-6.2% YoY), with COGS down 6.5%, SG&A down 5.5%.
- Capital allocation: $5.1M in CapEx, $131M cash on hand, net debt $449M.
- FY26 outlook: cautious on Q2 cash usage but confident in full-year targets.

**【Q&A Highlights】**
- **Revenue Resilience**: TDS growth offset GK weakness; Q1 bookings suggest stabilization in live learning.
- **Macro Impact**: U.S. public sector discretionary spend down, but Europe public sector up; DOGE impact TBD.
- **Free Cash Flow**: Q1 benefit from timing; expect Q2 cash usage but full-year positive FCF.
- **Transformation Phase 2**: Investing in go-to-market and product innovation, with benefits expected in FY27.
- **Government Business**: Fed sector softness in Q1, but Europe public sector strong; monitoring workforce reductions.
- **CFO Priorities**: Finance as strategic partner, integrating into go-to-market decisions.

Skillsoft (SKIL)-9 Jun 25-2026 Q1 Earnings call transcript

- **Revenue resilience**: Q4 FY25 revenue exceeded high-end guidance, with adjusted EBITDA at upper range, despite 4% FY25 decline.
- **Growth pivot**: FY26 targets 1%+ top-line growth, 5%+ EBITDA growth, and $13M-$18M free cash flow.
- **AI innovation momentum**: CAISY AI simulator preview program (100 customers) shows 1/3 hiring professional services, signaling enterprise adoption.
- **Customer retention strength**: LTM DRR 100%, Q4 DRR 105%, driven by product innovation and customer success focus.
- **Cost efficiency**: FY25 operating expenses down 6% YoY, free cash flow improved $27M YoY to $11.6M.


**【CEO Opening Remarks】**
- Q4 FY25 revenue exceeded high-end guidance, with adjusted EBITDA at the upper end of the range.
- Fiscal 2026 targets: Return to top-line growth, margin expansion, and positive free cash flow.
- Dollar retention rate (DRR) for LTM FY25 reached 100%, driven by strong Q4 DRR of 105%.
- Global Knowledge (GK) revenue decline improved from 20% YoY in H1 to 11% YoY in H2, signaling stabilization.
- Talent Development Solutions (TDS) bookings and DRR performance were strong, with 45%-50% of annual bookings occurring in Q4.
- Strategic shift: Allocate up to 20% of go-to-market resources to enterprise market, focusing on large enterprise customers and advanced AI capabilities.

**【CFO Financial Highlights】**
- Q4 FY25 total revenue: $133.8M (-2.8% YoY), FY25 total revenue: $531M (-4% YoY).
- TDS revenue: $102.8M (+1% YoY) in Q4, FY25: $405.5M (flat YoY).
- GK revenue: $30.9M (-13% YoY) in Q4, FY25: $125.4M (-15% YoY).
- Adjusted EBITDA: $29.9M (22% of revenue) in Q4, FY25: $109.1M (21% of revenue).
- Free cash flow: $13.2M in Q4, FY25: $11.6M (vs. -$15M FY24).
- FY26 guidance: Revenue $530M-$545M, adjusted EBITDA $112M-$118M, free cash flow $13M-$18M.

**【Q&A Key Takeaways】**
- Macro uncertainty (e.g., U.S. government policies) could impact business, but FY26 guidance assumes no material impact.
- CAISY AI simulator preview program (100 enterprise customers) shows strong engagement, with 1/3 hiring professional services for implementation.
- DRR improvement durability: 3-year contract structure and enhanced customer success efforts support long-term retention.
- FY26 reinvestment plan: 40%-50% of $45M+ FY25 expense savings will fund growth initiatives in H1 FY26.
- Margin expansion: Cost control and efficiency improvements (e.g., content development expenses down 6% YoY) drive 200bps EBITDA margin improvement YoY.


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