Skillsoft Corp. 10-Q Summary: Quarter Ended July 31, 2026
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended July 31, 2026. Skillsoft Corp. (NYSE: SKIL) operates as a single reportable segment following the classification of its Global Knowledge (GK) business as "held for sale" and "discontinued operations" on April 30, 2026. The sale of the GK business was consummated on July 6, 2026. The company focuses on an AI-native skills management platform for enterprise and consumer markets.
Key Financial Metrics
| Metric | Three Months Ended July 31, 2026 | Six Months Ended July 31, 2026 |
|---|---|---|
| Total Revenue (Continuing Ops) | $98.2 million | $192.7 million |
| Operating Income (Loss) | $3.4 million | $(4.9) million |
| Net Income (Loss) | $(42.4) million | $(85.5) million |
| Net Income (Loss) from Continuing Ops | $(15.0) million | $(33.7) million |
| Net Income (Loss) from Discontinued Ops | $(27.4) million | $(51.8) million |
| Adjusted EBITDA | $33.4 million | $60.1 million |
| Cash and Cash Equivalents | $90.3 million | $90.3 million (Balance Sheet) |
| Long-Term Debt | $567.2 million | $567.2 million (Balance Sheet) |
| Free Cash Flow (Operating) | N/A | $11.9 million |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 2.9% year-over-year (Q3) and 3.8% (YTD). This was driven primarily by a 25.9% decline in consumer subscription revenue and a slight 1.2% decline in enterprise revenue due to cautious public-sector spending.
- Operating Profitability: The company returned to operating profitability for the quarter ($3.4M) compared to a loss of $6.1M in the prior year quarter, largely due to reduced amortization expenses ($21.5M vs $29.9M) and lower operating costs.
- Discontinued Operations Impact: The sale of the GK business resulted in a significant non-cash loss of $22.4 million in the quarter, primarily due to the release of cumulative foreign currency translation adjustments ($20.1M) and final sales price adjustments.
- Restructuring Costs: Restructuring charges increased to $4.4 million for the quarter (vs. $1.6M prior year), associated with the GK sale, employee terminations, and contract terminations.
Guidance, Outlook, and Risks
- Outlook: Management expects the decline in the consumer business to continue. The company anticipates sufficient liquidity to fund operations for the next 12 months using operating cash flow and its accounts receivable facility.
- Debt Maturity: The company has approximately $578.6 million in term loans maturing in July 2028. Management is actively evaluating refinancing options.
- NYSE Compliance: Skillsoft received a notice of non-compliance with NYSE listing standards regarding market capitalization and stockholders' equity. The company submitted a plan to regain compliance by September 26, 2027, which was accepted by the NYSE.
- Transaction Risks: The purchaser of the GK business missed a $3.4 million payment due on July 31, 2026. As of September 1, 2026, only $0.5 million had been paid. There is a risk of further delays or non-payment regarding the remaining consideration.
Investor Verification Checklist
- Collection of Sale Proceeds: Verify the status of the outstanding $3.4 million Seller Note payment from the GK purchaser and the timeline for the remaining deferred consideration.
- Consumer Revenue Trend: Monitor the trajectory of consumer subscription revenue, which has declined significantly and is expected to continue declining.
- Debt Refinancing: Assess the company's progress in refinancing its $578.6 million term loan maturing in 2028.
- NYSE Listing Status: Track the company's progress toward meeting the $50 million market capitalization requirement to avoid delisting.
- Restructuring Execution: Confirm the completion of planned workforce reductions and cost-saving initiatives to sustain the improved Adjusted EBITDA margins.