Skillsoft (NYSE:SKIL) reported lower first-quarter fiscal 2027 revenue as expected weakness in government bookings and the company’s consumer business weighed on results, while management pointed to improving customer retention, platform adoption and bookings as signs that its transformation plan is gaining traction.
On the company’s earnings call for the quarter ended April 30, 2026, Executive Chair and Chief Executive Officer Ron Hovsepian said revenue declined about 5% year over year, driven by “booking softness in our government business in the first half of last year” and “anticipated declines in our consumer business.” He said some expected offsets from labor-based offerings, including professional services and coaching, shifted to later periods in the fiscal year.
Revenue declines, but margins improve
Chief Financial Officer Ron Kisling, who recently joined the company, said first-quarter revenue from continuing operations was $94.5 million, down 4.7% from the prior-year period. The company’s continuing operations are comprised of its Talent Development Solutions business, which management said will be referred to as Skillsoft after the planned sale of Global Knowledge.
Kisling said first-quarter dollar retention rate was 105%, up from 91% in the prior-year quarter. The last-12-month dollar retention rate was 98%, compared with 99% a year earlier. He said revenue and last-12-month retention were affected by softness in government bookings in the first half of fiscal 2026, while revenue was also pressured by declines in the consumer business.
Adjusted EBITDA from continuing operations was $26.6 million, essentially flat with $26.8 million in the year-earlier quarter. Adjusted EBITDA margin improved to 28.2% from 27.1%.
Skillsoft reported a GAAP net loss from continuing operations of $18.7 million, compared with a loss of $29.6 million in the prior-year period. GAAP net loss per share from continuing operations was $2.12, compared with a loss of $3.56 per share a year earlier. Adjusted net income was $10.2 million, or $1.16 per share, compared with $9.5 million, or $1.15 per share, in the prior-year quarter.
Total adjusted operating expenses were $67.9 million, down $4.5 million, or 6.2%, year over year. Selling and marketing expenses fell 8.4% to $26.3 million, reflecting lower spending following the company’s go-to-market redesign, while general and administrative expenses declined 13.7% to $13.2 million.
Global Knowledge divestiture expected to sharpen focus
A major theme of the call was Skillsoft’s pending sale of its Global Knowledge business to an affiliate of Enduring Ventures. Hovsepian said the transaction is expected to close in fiscal Q2 and will allow Skillsoft to concentrate on its “AI-native skills management platform.”
“We believe this is the right direction for Skillsoft,” Hovsepian said. “GK served an important purpose, but post-close, we will concentrate fully on our AI-native skills management platform, where we see the greatest opportunity to help organizations build workforce readiness and prove the impact of skills on business outcomes.”
Kisling said Global Knowledge has been in decline for many years and is expected to continue generating adjusted EBITDA losses of $10 million to $15 million on an annualized basis until the divestiture and transition are complete. He said eliminating that negative impact should benefit profitability and cash flow beginning in fiscal 2028.
From a liquidity standpoint, Kisling said Skillsoft expects proceeds net of cash divested and excluding transaction costs of $5 million to $8 million over two years after closing. Transaction-related costs are expected to total approximately $8 million to $10 million, making the long-term liquidity impact “neutral to slightly below neutral.” For the quarter ending July 31, 2026, assuming the sale closes, Skillsoft expects a liquidity reduction of as much as $25 million tied to the sale, including cash left with the business, transaction expenses and operating losses.
Debt refinancing to become top priority
Management said that after the Global Knowledge transaction closes, refinancing debt will become a central focus. Hovsepian said addressing upcoming debt maturities will be “management’s top financial priority” and that the company will evaluate alternatives “with discipline and urgency.”
At quarter end, Skillsoft had GAAP cash, cash equivalents and restricted cash of $118.4 million. Total gross debt, including borrowings on the company’s term loan and accounts receivable facility, was $576 million, down slightly from about $580 million a year earlier. Net debt was approximately $457 million, down from about $481 million in the prior-year period.
In response to an analyst question, Hovsepian said additional management bandwidth after the Global Knowledge sale would be directed toward accelerating growth and debt refinancing.
AI and platform adoption remain strategic focus
Hovsepian said AI is increasing the urgency for enterprises to address skills gaps. He previewed Skillsoft’s Workforce Readiness Report, saying it found that only one in four employees feel AI-ready. The report, based on a survey of 2,000 employees, managers and executives globally, also found a 53-point gap between how leaders and employees rate AI readiness, and that only 11% of employees are assessed using formal skills benchmarks.
Hovsepian said the company released an AI-powered skills visibility dashboard during the quarter, designed to provide managers with real-time insight into team capabilities, skilling progress and readiness gaps.
Management also highlighted customer examples, including a Fortune 500 global energy company that returned to Skillsoft from a competing vendor and a U.S. government contractor that replaced an existing vendor with Skillsoft. Hovsepian said the contractor achieved a 7x return on investment, $2.7 million in business value and 82% of learners improving skill proficiency across 426 benchmarks.
During the question-and-answer portion of the call, Hovsepian said adoption of the company’s new platform is running ahead of internal targets, prompting Skillsoft to raise its internal goal. He said the market reaction to its skills management offering has been “very positive.”
Full-year guidance maintained
Skillsoft maintained its fiscal 2027 outlook. The company expects revenue of $388 million to $406 million, adjusted EBITDA from continuing operations of $108 million to $116 million, or about 28% of revenue, and free cash flow from continuing operations of $14 million to $22 million.
Kisling said the guidance reflects some variability and risk in the macroeconomic environment. He added that while first-quarter cash collections were strong, the company expects to consume cash in continuing operations in the second and third quarters before generating free cash flow in the fourth quarter.
“Given the leading indicators that we see, we feel that we’re very on track to the plans that we had at the beginning of the year,” Kisling said.
About Skillsoft (NYSE:SKIL)
Skillsoft (NYSE: SKIL) is a leading provider of corporate digital learning solutions designed to help organizations develop skills and drive performance. The company offers a range of cloud-based learning platforms and content libraries that cover technical training, leadership development, compliance, and productivity applications. Skillsoft’s flagship platform, Percipio, delivers micro-learning modules, video tutorials, books and audiobooks, hands-on labs and simulations, and practice assessments within a unified interface that can be accessed on desktop or mobile devices.
Skillsoft’s content spans IT certification preparation, software development, cloud computing, cybersecurity, project management, and a variety of professional skills such as communication, management and sales.
