- Content & Platform Bookings grew 9% in constant
currency.
- Content & Platform Dollar Retention Rate increased three
percentage points to 101% on an LTM basis.
- Launched pioneering eight-module generative AI course with
record-setting initial enrollments.
Skillsoft Corp. (NYSE: SKIL) (“Skillsoft” or the “Company”), a
leading platform for transformative learning experiences, today
announced its financial results for the first quarter of fiscal
2024 ended April 30, 2023.
“Skillsoft delivered a strong start to the fiscal year with near
double-digit Bookings growth in our Content & Platform segment
on a constant currency basis, highlighting the value of our
transformative learning solutions,” said Jeffrey R. Tarr,
Skillsoft’s Chief Executive Officer. “The strength in this high
margin, SaaS-based segment contributed to expanded profitability on
an Adjusted EBITDA basis and sets us up well for the year
ahead.”
Tarr added, “Continued low unemployment and the proliferation of
new technologies is driving organizations to invest in enterprise
learning as a strategic priority. Further, we see the rapid rise of
Generative AI creating a new imperative for reskilling that will
impact nearly every knowledge worker and organization. We’ve spent
the last two years assembling an unrivaled collection of assets and
believe we are well-positioned to seize the opportunity in front of
us.”
Fiscal 2024 First Quarter Select Metrics and Financials from
Continuing Operations (1)
- Content & Platform segment Bookings grew 9% on a constant
currency basis. Total Bookings were down 4% on a constant currency
basis due to an 18% constant currency decline in Instructor-Led
Training segment Bookings.
- GAAP Revenue of $136 million grew 1%, with 10% growth in
Content & Platform segment GAAP Revenue to $99 million, offset
by an 18% decline in Instructor-Led Training segment GAAP Revenue
to $37 million.
- On a Pro Forma constant currency basis, Content & Platform
segment Revenue grew 2%, while total Revenue was down 3% due to a
14% decline in Instructor-Led Training segment Revenue.
- GAAP Net Loss of $44 million compared to a loss of $22 million
in the prior year. Adjusted EBITDA from continuing operations of
$22 million, up 13% on a Pro Forma constant currency basis and
reflecting a margin of 16% of GAAP Revenue.
- Repurchased 4.4 million shares under the Company’s $30 million
share repurchase program.
- Ended the quarter with $178 million of cash and cash
equivalents.
Fiscal 2024 First Quarter Business Highlights
- LTM Content & Platform Dollar Retention Rate was
approximately 101% in the quarter, up from approximately 98% in the
year-ago period. Quarterly Content & Platform Dollar Retention
Rate was approximately 108%, up from approximately 101% in the
year-ago period.
- Launched a pioneering generative AI course featuring eight
modules spanning topics including ChatGPT use cases, practical
ethical AI concepts, and ChatGPT prompt engineering, among
others.
- Brought to market Codecademy Plus, a new subscription product
focused on upskilling and continuous career development, and
introduced upgraded features for Codecademy Pro, helping learners
gain the necessary skills for entry-level technology careers with
real-time coding exercises, professional certifications, and career
advice.
- Released our annual Lean Into Learning report, which examines
the state of digital learning, as well as the most in-demand skills
and competencies for the future of work, and published our 2023
Women In Tech Report, which explores the top challenges and areas
of opportunity for women working in the technology industry.
- Recognized in commissioned studies by Forrester Consulting for
the benefits and Total Economic Impact™ of the Company’s learning
solutions, including a 263% ROI, 274% ROI, and 317% ROI for
Skillsoft’s Leadership & Business, Technology & Developer,
and Compliance solutions, respectively, over a three-year
span.
Full-Year Fiscal 2024 Financial Outlook (2)
The following table reflects Skillsoft’s reaffirmed financial
outlook for the full-year fiscal 2024 ended January 31, 2024, based
on current market conditions, expectations, and assumptions:
Bookings
$610 million to $640 million
GAAP Revenue
$555 million to $585 million
Adjusted EBITDA
$100 million to $105 million
(1) Growth calculated relative to the comparable prior year
period. Pro Forma results are presented as if Codecademy had merged
on February 1, 2022. 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 15,
2022.
(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. We
have provided at the back of this release reconciliations of our
historical non-GAAP financial measures to the comparable GAAP
measures.
Key Operational Metrics and Non-GAAP
Financial Measures (3)
Change
Three Months Ended
Constant
April 30,
Change
Currency
2023
2022
$
%
%
Bookings (4)
Continuing Operations:
Content & Platform
$
64,533
$
60,146
$
4,387
7
%
9
%
Instructor-Led Training
43,936
55,665
(11,729
)
-21
%
-18
%
Total Bookings
$
108,469
$
115,811
$
(7,342
)
-6
%
-4
%
GAAP Revenue
Continuing Operations:
Content & Platform
$
98,573
$
89,785
$
8,788
10
%
11
%
Instructor-Led Training
36,981
45,053
(8,072
)
-18
%
-14
%
Total
$
135,554
$
134,838
$
716
1
%
3
%
Pro Forma Revenue (4)
Continuing Operations:
Content & Platform
$
98,573
$
97,843
$
730
1
%
2
%
Instructor-Led Training
36,981
45,053
(8,072
)
-18
%
-14
%
Total Pro Forma Revenue
$
135,554
$
142,896
$
(7,342
)
-5
%
-3
%
GAAP Net Income (Loss)
$
(44,224
)
$
(21,643
)
$
(22,581
)
-104
%
Pro Forma Non-GAAP Operating Expenses
(4)
Pro Forma Non-GAAP costs of revenues
$
37,576
$
38,465
$
(889
)
-2
%
1
%
Pro Forma Non-GAAP content and software
development expenses
14,306
18,465
(4,159
)
-23
%
-21
%
Pro Forma Non-GAAP selling and marketing
expenses
43,843
41,477
2,366
6
%
7
%
Pro Forma Non-GAAP general and
administrative expenses
18,201
24,811
(6,610
)
-27
%
-26
%
Total Pro Forma Non-GAAP Operating
Expenses
$
113,926
$
123,218
$
(9,292
)
-8
%
-6
%
Pro Forma Adjusted Net Income (Loss)
& Adjusted EBITDA (4)
Continuing Operations:
Pro Forma Adjusted Net Income
(Loss)
$
(30,053
)
$
(11,499
)
$
(18,554
)
-161
%
Pro Forma Adjusted EBITDA
$
21,628
$
19,680
$
1,948
10
%
13
%
___________
(3)
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.
(4)
For the three months ended April 30, 2022,
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 Codecademy as if
the merger had closed on February 1, 2022.
Webcast and Conference Call Information
Skillsoft will host a conference call and webcast today at 5:00
p.m. Eastern Time to discuss its financial results. To access the
call, dial (877) 413‑9278 from the United States and Canada or
(215) 268‑9914 from international locations. The live event can be
accessed from the Investor Relations section of Skillsoft’s website
at investor.skillsoft.com. A replay will be available for six
months.
About Skillsoft
Skillsoft delivers transformative learning experiences that
propel organizations and people to grow together. The Company
partners with enterprise organizations and serves a global
community of learners to prepare today’s employees for tomorrow’s
economy. With Skillsoft, customers gain access to blended,
multimodal learning experiences that do more than build skills,
they grow a more capable, adaptive, and engaged workforce. Through
a portfolio of best-in-class content, a platform that is
personalized and connected to customer needs, world-class tech, and
a broad ecosystem of partners, Skillsoft drives continuous growth
and performance for employees and their organizations by overcoming
critical skill gaps and unlocking human potential. Learn more at
www.skillsoft.com.
NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE
METRICS
We track the non-GAAP financial measures and key performance
metrics that we believe are key financial measures of our success.
Non-GAAP measures and key performance metrics are frequently used
by securities analysts, investors, and other interested parties in
their evaluation of companies comparable to us, many of which
present non-GAAP measures and key performance metrics when
reporting their results. These measures can be useful in evaluating
our performance against our peer companies because we believe the
measures provide users with valuable insight into key components of
U.S. GAAP financial disclosures. For example, a company with higher
U.S. GAAP net income may not be as appealing to investors if its
net income is more heavily comprised of gains on asset sales.
Likewise, excluding the effects of interest income and expense
moderates the impact of a company’s capital structure on its
performance. However, non-GAAP measures and key performance metrics
have limitations as analytical tools. Because not all companies use
identical calculations, our presentation of non-GAAP financial
measures and key performance metrics may not be comparable to other
similarly titled measures of other companies. They are not
presentations made in accordance with U.S. GAAP, are not measures
of financial condition or liquidity, and should not be considered
as an alternative to profit or loss for the period determined in
accordance with U.S. GAAP or operating cash flows determined in
accordance with U.S. GAAP. As a result, these performance measures
should not be considered in isolation from, or as a substitute
analysis for, results of operations as determined in accordance
with U.S. GAAP.
We have provided at the back of this release reconciliations of
our historical non-GAAP financial measures to the comparable GAAP
measures. We do not reconcile our forward-looking non-GAAP
financial measures to the corresponding U.S. GAAP measures, due to
variability and difficulty in making accurate forecasts and
projections and/or certain information not being ascertainable or
accessible; and because not all of the information necessary for a
quantitative reconciliation of these forward-looking non-GAAP
financial measures to the most directly comparable U.S. GAAP
financial measure is available to us without unreasonable efforts.
For the same reasons, we are unable to address the probable
significance of the unavailable information. We provide non-GAAP
financial measures that we believe will be achieved, however we
cannot accurately predict all of the components of the adjusted
calculations and the U.S. GAAP measures may be materially different
than the non-GAAP measures.
We disclose the following non-GAAP financial measures and key
performance metrics in this press release because we believe these
non-GAAP financial measures and key performance metrics provide
meaningful supplemental information.
- Bookings - Bookings in any particular period represents
the dollar value of orders received during that period and reflects
(i) subscription renewals, upgrades, churn, and downgrades to
existing customers, (ii) non-subscription services, and (iii) sales
to new customers. Bookings generally represents a customer’s annual
obligation (versus the life of the contract), and, for the
subscription business, revenue is recognized for such bookings over
the following 12 months. We use bookings to measure and monitor
current period business activity with respect to our ability to
sell subscriptions and services to our platform. Bookings are
adjusted and presented on a Pro Forma basis as if Codecademy had
merged on February 1, 2022, to enhance comparability.
- Pro Forma Revenue – Pro Forma Revenue is defined as GAAP
revenue adjusted in accordance with Regulation S-X, Article 11 as
if Codecademy had merged on February 1, 2022, to enhance
comparability. Pro Forma Revenue is reconciled to the reported GAAP
revenue for all the periods presented.
- Dollar Retention Rate (“DRR”) - For
existing customers at the beginning of a given period, DRR
represents subscription renewals, upgrades, churn, and downgrades
in such period divided by the beginning total renewable base for
such customers for such period. Renewals reflect customers who
renew their subscription, inclusive of auto-renewals for multi-year
contracts, while churn reflects customers who choose to not renew
their subscription. Upgrades include orders from customers that
purchase additional licenses or content (e.g., a new Leadership and
Business module), while downgrades reflect customers electing to
decrease the number of licenses or reduce the size of their content
package. Upgrades and downgrades also reflect changes in pricing.
We use our DRR to measure the long-term value of customer contracts
as well as our ability to retain and expand the revenue generated
from our existing customers.
- Adjusted Net Income (Loss) - Adjusted Net Income (Loss)
is defined as GAAP Net Income (Loss) excluding non-cash items,
discrete and event-specific costs that do not represent normal,
recurring, cash operating expenses necessary for our business
operations, and certain accounting income and/or expenses that
management believes are necessary to enhance the comparability and
are useful in assessing our operating performance, include the
following (including the related tax effects):
- Stock-based compensation expense – Non-cash expense associated
with stock-based compensation.
- Restructuring charges – Severance costs and the abandonment of
right-of-use assets resulted from the acquisition integration
process and cost saving initiatives.
- Fair value adjustments – Mark-to-market adjustments of warrants
and hedge instruments.
- Foreign currency impact – Unrealized and realized foreign
exchange gains or losses due to fluctuations in exchange
rates.
- Acquisition and integration related costs – Non-recurring costs
incurred to effectuate an acquisition, including contingent
compensation expenses, and integration related costs.
- Transformation costs – Non-recurring costs incurred to
transform our operations through significant strategic non-ordinary
course transactions.
- System migration costs – Non-recurring costs of temporary
resources needed for the migration of content and customers from
our legacy system to a global platform.
- Income from discontinued operations – Income from discontinued
operations that do not reflect our current operating
performance.
- (Gain)/loss on sale of business - gain or loss on non-routine
sale of business.
- Impairment charges - non-cash goodwill, intangible or other
asset impairment charges.
- Adjusted EBITDA - Adjusted EBITDA is defined as Adjusted
Net Loss excluding interest expense or income, benefit from or
provision for income taxes, depreciation and amortization
expense.
- Non-GAAP Operating Expenses – GAAP operating expenses,
less depreciation, stock-based compensation, system migration
costs, transformation costs, other non-cash charges and Pro Forma
adjustments, as applicable.
- Pro Forma Adjusted Net Income (Loss) – Pro Forma
Adjusted Net Income (Loss) is defined as Adjusted Net Income (Loss)
adjusted in accordance with Regulation S-X, Article 11 as if
Codecademy had merged on February 1, 2022, to enhance
comparability.
- Pro Forma Adjusted EBITDA – Pro Forma Adjusted EBITDA is
defined as Adjusted EBITDA adjusted in accordance with Regulation
S-X, Article 11 as if Codecademy had merged on February 1, 2022, to
enhance comparability.
Cautionary Notes Regarding Forward Looking Statements
This document includes statements that are, or may be deemed to
be, “forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to
be covered by the safe harbors created by those laws. All
statements, other than statements of historical facts, that address
activities, events or developments that we expect or anticipate may
occur in the future, including such things as our outlook
(including bookings, revenue and adjusted EBITDA), our product
development and planning, our pipeline, future capital
expenditures, share repurchases, financial results, the impact of
regulatory changes, existing and evolving business strategies and
acquisitions and dispositions, demand for our services, competitive
strengths, the benefits of new initiatives, growth of our business
and operations, and our ability to successfully implement our
plans, strategies, objectives, expectations and intentions are
forward-looking statements. Also, when we use words such as “may,”
“will,” “would,” “anticipate,” “believe,” “estimate,” “expect,”
“intend,” “plan,” “project,” “forecast,” “seek,” “outlook,”
“target,” “goal,” “probably,” or similar expressions, we are making
forward-looking statements. Such statements are based upon the
current beliefs and expectations of Skillsoft’s management and are
subject to significant risks and uncertainties. All forward-looking
disclosure is speculative by its nature, and we caution you against
unduly relying on these forward-looking statements.
Factors that could cause or contribute to such differences
include those described under “Part I - Item 1A. Risk Factors” in
our Form 10‑K for the fiscal year ended January 31, 2023. These
factors should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements included in our
other periodic filings with the Securities and Exchange Commission.
The forward-looking statements contained in this document represent
our estimates only as of the date of this filing and should not be
relied upon as representing our estimates as of any subsequent
date. While we may elect to update these forward-looking statements
in the future, we specifically disclaim any obligation to do so,
whether to reflect actual results, changes in assumptions, changes
in other factors affecting such forward-looking statements, or
otherwise.
Although we believe that the assumptions underlying our
forward-looking statements are reasonable, any of these
assumptions, and therefore also the forward-looking statements
based on these assumptions, could themselves prove to be
inaccurate. Given the significant uncertainties inherent in the
forward-looking statements included in this document, our inclusion
of this information is not a representation or guarantee by us that
our objectives and plans will be achieved. Annualized, Pro Forma,
projected and estimated numbers are used for illustrative purpose
only, are not forecasts and may not reflect actual results.
Additionally, statements as to market share, industry data and our
market position are based on the most currently available data
available to us and our estimates regarding market position or
other industry data included in this document or otherwise
discussed by us involve risks and uncertainties and are subject to
change based on various factors, including as set forth above.
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (IN
THOUSANDS, EXCEPT NUMBER OF SHARES)
April 30, 2023
January 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
178,049
$
170,359
Restricted cash
9,051
7,197
Accounts receivable, net of allowance for
credit losses of approximately $291 and $221 as of April 30, 2023
and January 31, 2023, respectively
109,981
183,592
Prepaid expenses and other current
assets
48,037
44,596
Total current assets
345,118
405,744
Property and equipment, net
6,920
10,150
Goodwill
458,227
457,744
Intangible assets, net
703,369
738,066
Right of use assets
10,153
14,633
Other assets
16,574
16,350
Total assets
$
1,540,361
$
1,642,687
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current maturities of long-term debt
$
8,015
$
6,404
Borrowings under accounts receivable
facility
45,237
39,693
Accounts payable
14,194
18,338
Accrued compensation
21,397
34,325
Accrued expenses and other current
liabilities
35,793
41,474
Lease liabilities
4,177
4,198
Deferred revenue
245,539
280,676
Total current liabilities
374,352
425,108
Long-term debt
580,715
581,817
Warrant liabilities
1,902
4,754
Deferred tax liabilities
69,224
73,976
Long term lease liabilities
11,812
11,947
Deferred revenue - non-current
1,689
1,778
Other long-term liabilities
11,467
11,551
Total long-term liabilities
676,809
685,823
Commitments and contingencies
Shareholders’ equity:
Shareholders’ common stock - Class A
common shares, $0.0001 par value: 375,000,000 shares authorized and
159,578,765 shares issued and outstanding at April 30, 2023, and
163,655,881 shares issued and outstanding at January 31, 2023
14
14
Additional paid-in capital
1,530,413
1,521,574
Accumulated deficit
(1,016,417
)
(972,193
)
Treasury stock
(10,891
)
(2,845
)
Accumulated other comprehensive income
(loss)
(13,919
)
(14,794
)
Total shareholders’ equity
489,200
531,756
Total liabilities and shareholders’
equity
$
1,540,361
$
1,642,687
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months
Three Months
Ended
Ended
April 30, 2023
April 30, 2022
Revenues:
Total revenues
$
135,554
$
134,838
Operating expenses:
Costs of revenues
37,824
38,009
Content and software development
17,035
16,331
Selling and marketing
45,927
39,561
General and administrative
25,296
29,346
Amortization of intangible assets
38,245
39,558
Acquisition-related costs
1,391
13,312
Restructuring
5,218
3,956
Total operating expenses
170,936
180,073
Operating income (loss)
(35,382
)
(45,235
)
Other income (expense), net
(375
)
1,052
Fair value adjustment of warrants
2,852
10,106
Fair value adjustment of hedge
instruments
270
—
Interest income
645
160
Interest expense
(15,936
)
(11,514
)
Income (loss) before benefit from income
taxes
(47,926
)
(45,431
)
Benefit from for income taxes
(4,384
)
(22,337
)
Income (loss) from continuing
operations
(43,542
)
(23,094
)
Gain (loss) on sale of business
(682
)
—
Income (loss) from discontinued
operations, net of tax
—
1,451
Net income (loss)
$
(44,224
)
$
(21,643
)
Net Income (loss) per share:
Ordinary – Basic and diluted - continuing
operations
$
(0.27
)
$
(0.16
)
Ordinary – Basic and diluted -
discontinued operations
-
0.01
Ordinary – Basic and diluted
$
(0.27
)
$
(0.15
)
Weighted average common shares
outstanding:
Ordinary – Basic and diluted
163,154
142,209
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Three Months
Three Months
Ended
Ended
April 30, 2023
April 30, 2022
Cash flows from operating activities:
Net income (loss)
$
(44,224
)
$
(21,643
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Share-based compensation
9,128
6,898
Depreciation and amortization
1,144
2,533
Amortization of intangible assets
38,245
43,854
Provision for (recovery of) doubtful
accounts
70
(320
)
Provision for (benefit from) income taxes
– non-cash
(4,934
)
(26,434
)
Non-cash interest expense
664
415
Non-cash lease and property and equipment
impairment charges
4,819
—
Gain (loss) on sale of business
682
—
Fair value adjustment to warrants
(2,852
)
(10,106
)
Unrealized loss on derivative
instrument
(270
)
—
Changes in assets and liabilities, net of
effects from acquisitions:
Right-of-use asset
43
2,836
Accounts receivable
73,624
84,107
Prepaid expenses and other current
assets
297
(367
)
Accounts payable
(4,340
)
2,042
Accrued expenses, including long-term
(16,367
)
(22,768
)
Lease liability
(156
)
(3,053
)
Deferred revenue
(34,109
)
(50,112
)
Net cash provided by (used in) operating
activities
21,464
7,882
Cash flows from investing activities:
Purchase of property and equipment
(1,636
)
(1,613
)
Internally developed software -
capitalized costs
(2,683
)
(2,286
)
Sale of SumTotal, net of cash
transferred
(5,137
)
—
Acquisition of Codecademy, net of cash
received
—
(198,633
)
Net cash used in investing activities
(9,456
)
(202,532
)
Cash flows from financing activities:
Shares repurchased for tax withholding
upon vesting of restricted stock-based awarded
(296
)
(309
)
Payments to acquire treasury stock
(7,155
)
—
Proceeds from issuance of term loans, net
of fees
—
157,088
Proceeds from accounts receivable
facility, net of borrowings
5,544
(46,639
)
Principal payments on Term loans
—
(1,601
)
Net cash provided by (used in) financing
activities
(1,907
)
108,539
Effect of exchange rate changes on cash
and cash equivalents
(557
)
(2,157
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
9,544
(88,268
)
Cash, cash equivalents and restricted
cash, beginning of period
177,556
168,923
Cash, cash equivalents and restricted
cash, end of period
$
187,100
$
80,655
Supplemental disclosure of cash flow
information:
Cash and cash equivalents
$
178,049
$
69,517
Restricted cash
9,051
4,848
Cash attributable to discontinued
operations
—
6,290
Cash, cash equivalents and restricted
cash, end of period
$
187,100
$
80,655
SKILLSOFT CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in
thousands, unaudited)
Three Months Ended
Three Months Ended
April 30, 2023
April 30, 2022
Revenues:
Revenues, as reported
$
135,554
$
134,838
Net income (loss), as reported
$
(44,224
)
$
(21,643
)
Income from discontinued operations, net
of tax
-
(1,475
)
Loss on sale of business
682
-
Acquisition and integration related
costs
1,391
13,312
Restructuring
5,218
3,956
Foreign currency impact
469
(952
)
Warrant fair value adjustment
(2,852
)
(10,106
)
Fair value adjustment of hedge
instruments
(270
)
-
Stock-based compensation expense
9,124
8,493
Transformation costs
1,127
851
System migration costs
667
1,612
Tax impact of non-GAAP adjustments
(1,385
)
(1,392
)
Adjusted net income (loss) from
continuing operations
(30,053
)
(7,343
)
Interest expense, net
15,291
11,377
Expense from income taxes, excluding tax
impacts above
(2,999
)
(20,945
)
Depreciation
1,144
1,418
Amortization of intangible assets
38,245
39,558
Adjusted EBITDA from continuing
operations
$
21,628
$
24,065
GAAP Operating Margin %
-26.1
%
-33.5
%
Amortization of intangible assets
28.4
%
29.2
%
Acquisition-related costs
1.0
%
9.9
%
Restructuring
3.8
%
2.9
%
Stock-based compensation expense
6.7
%
6.3
%
Transformation costs
0.8
%
0.6
%
System migration costs
0.5
%
1.2
%
Depreciation
0.8
%
1.1
%
Other
0.1
%
0.1
%
Adjusted EBITDA Margin %
16.0
%
17.8
%
SKILLSOFT CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - continued
(in thousands, unaudited)
Three Months Ended April
30,
2023
2022
Operating expenses:
GAAP costs of revenues
$
37,824
$
38,009
Depreciation
(151
)
(474
)
Stock-based compensation
(97
)
(13
)
Codecademy Pro Forma (1)
-
943
Non-GAAP costs of revenues
37,576
38,465
GAAP content and software development
17,035
16,331
Depreciation
(50
)
(120
)
Stock-based compensation
(2,012
)
(1,575
)
System migration
(667
)
(1,612
)
Codecademy Pro Forma (1)
-
5,441
Non-GAAP content and software
development
14,306
18,465
GAAP selling and marketing
45,927
39,561
Depreciation
(267
)
(272
)
Stock-based compensation
(1,681
)
(1,477
)
Transformation
(136
)
-
Codecademy Pro Forma (1)
-
3,665
Non-GAAP selling and marketing
43,843
41,477
GAAP general and administrative
25,296
29,346
Depreciation
(677
)
(552
)
Stock-based compensation
(5,333
)
(5,427
)
Transformation
(1,085
)
(951
)
Codecademy Pro Forma (1)
-
2,395
Non-GAAP general and
administrative
18,201
24,811
Total GAAP operating expenses
126,082
123,247
Depreciation
(1,145
)
(1,418
)
Stock-based compensation
(9,123
)
(8,492
)
System migration
(667
)
(1,612
)
Transformation
(1,221
)
(951
)
Codecademy Pro Forma (1)
-
12,444
Total Non-GAAP operating
expenses
$
113,926
$
123,218
____________
(1)
For the three months ended April 30, 2022,
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 Codecademy as if
the merger had closed on February 1, 2022.
SKILLSOFT CORP. PRO
FORMA REVENUE (IN THOUSANDS)
Three Months Ended April
30,
2023
2022
Revenue, as reported:
$
135,554
$
134,838
Pro Forma adjustments:
Revenue from acquisitions (1)
-
8,058
Pro Forma Revenue (2)
$
135,554
$
142,896
____________
(1)
Revenue from acquisitions for the three
months ended April 30, 2022 only includes Codecademy's revenue for
the period from February 1, 2022 to April 4, 2022 as its
post-acquisition revenue is included in the GAAP revenue.
(2)
Pro Forma Revenue is presented in Note 3
"Business Combinations" of the Notes to Unaudited Condensed
Consolidated Financial Statements included in our Form 10-Q to be
filed with the SEC for the quarterly period ended April 30, 2023 in
accordance with Regulation S-X, Article 11.
SKILLSOFT CORP. PRO
FORMA ADJUSTED NET INCOME (LOSS) (IN THOUSANDS)
Three Months Ended April
30,
2023
2022
Adjusted net income (loss) from
continuing operations (1)
$
(30,053
)
$
(7,343
)
Pro Forma adjustments:
Adjusted net income (loss) from
acquisitions (2)
-
(4,156
)
Pro Forma Adjusted Net Income
(Loss)
$
(30,053
)
$
(11,499
)
____________
(1)
See RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES within this press release for more details.
(2)
Adjusted net income (loss) from
acquisitions for the three months ended April 30, 2022 only
includes Codecademy's adjusted net income (loss) for the period
from February 1, 2022 to April 4, 2022 as its post-acquisition
adjusted net income (loss) is included in the adjusted net income
(loss) from continuing operations.
SKILLSOFT CORP. PRO
FORMA ADJUSTED EBITDA AND FREE CASH FLOW (IN
THOUSANDS)
Three Months Ended April
30,
2023
2022
Pro Forma Adjusted EBITDA
Adjusted EBITDA from continuing operations
(1)
$
21,628
$
24,065
Pro Forma adjustments:
Adjusted EBITDA from acquisitions (2)
-
(4,385
)
Pro Forma adjusted EBITDA
$
21,628
$
19,680
Free Cash Flow Reconciliation
Net cash provided by (used in) operating
activities
$
21,464
$
7,882
Purchase of property and equipment
(1,636
)
(1,613
)
Internally developed software -
capitalized costs
(2,683
)
(2,286
)
Total free cash flow
$
17,145
$
3,983
______________
(1)
See RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES within this press release for more details.
(2)
Adjusted EBITDA from acquisitions for the
three months ended April 30, 2022 includes Codecademy's adjusted
EBITDA for the period from February 1, 2022 to April 4, 2022 as its
post-acquisition adjusted EBITDA is included in the adjusted EBITDA
from continuing operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230606005486/en/
Investors and Media Chad W. Lyne SVP, Strategic Finance
& Investor Relations Officer chad.lyne@skillsoft.com
Skillsoft (NYSE:SKIL)
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